The overall risk of the economy remains relatively low as most of the more prominent indicators listed show a low level of risk. However, a slowdown in recent jobs growth and a slight increase in the number of economic indicators that have a moderate level of risk warrants some attention.
Comments on this week’s report:
- Treasury yield spreads widened but still remain historically narrow as the 10-year minus 2-year spread sits at 0.17% and the 10-year minus 3-month spread sits at 0.22%.
- The U.S. added a marginal 20,000 jobs in February (as measured by total nonfarm payrolls) and reduced its year-over-year growth from 1.91% to 1.69%. A low level of risk is still indicated for jobs growth, but it should still be closely monitored if its growth continues to slowdown.
- Despite a slowdown in jobs growth, the unemployment rate dropped from 4.0% to 3.80% in February as government workers go back to the workforce after the government shutdown.
- Wage growth, as measured by average hourly earnings of production and nonsupervisory employees, continues to grow at a strong rate as its year-over-year rate increases from 3.31% to 3.48%.
- Housing starts, which took a steep dive back in December, bounced back in January as its year-over-year growth increased from -14.30% to -7.80%. However, the data still suggests a moderate level of risk as it struggles to have a positive year-over-year rates of change.